OTTAWA — Canada has major stakes in how the United States approaches the review of the North American trade pact, but only a handful of Canadians are testifying on the issue at hearings that the Office of the U.S. Trade Representative holds this week in Washington, D.C.

The written briefs that organizations focused on Canada-U.S. issues submitted ahead of their testimony make a range of arguments in favour of sustaining the United States-Mexico-Canada Agreement (USMCA)—despite President Donald Trump’s open skepticism about its future.

It’s good for the U.S., too

The witnesses argue the USMCA, which Trump negotiated during his first administration, has brought predictability and stability the U.S. also needs to attract and retain business investment. “The USMCA has allowed Canadian companies to partner with suppliers, establish operations and invest in the United States,” wrote Goldy Hyder, president and CEO of the Business Council of Canada.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, argued in his submission that the U.S. is less competitive when going it alone. “As China continues to invest in electric vehicle production, battery supply chains and advanced manufacturing, a fragmented North American market risks falling behind and ceding its leading position.”

Digital upgrades

Barry Appleton, a Toronto-based trade lawyer who is also co-director and senior fellow at the Center for International Law at New York Law School, highlighted how the digital trade provisions in the USMCA have fallen behind recent advancements in artificial intelligence. “To preserve continental stability, the U.S. should lead in clarifying data jurisdiction, cloud security and algorithmic accountability across borders. Predictability in digital trade is the new foundation for supply-chain resilience,” he wrote. That does not mean the U.S. should dictate how Canada and Mexico govern their digital spheres, Appleton added. “Technological non-alignment—the right of each nation to participate in global AI ecosystems without subordination to any single digital power—should be embraced as compatible with American leadership.”

The Future Borders Coalition, whose executive director Laura Dawson is scheduled to testify on Thursday, recommended building a continent-wide digital trade platform to allow the three countries to share customs data in real time, as well as electronic invoicing, digital certificates of origin and AI-powered customs compliance tools. Technology such as blockchain and radio-frequency identification tags could also help streamline customs clearance—and better detect fraud, the group wrote. Using digital tools to assess risk could also help prevent misuse of the “de minimis” threshold that allows low-value goods to enter duty-free. The group wants Canada to increase its own de minimis threshold, which is now $150 for the U.S. and Mexico. The U.S. threshold stood at US$800 before Trump suspended it last August.

Getting along

Jamie Tronnes, executive director of the Washington-based Center for North American Prosperity and Security, acknowledged that Americans would see downsides to the USMCA. She mentioned limited access to Canada’s supply-managed dairy market, which rankles some U.S. farmers, as well as this country’s digital services tax. It would have primarily affected the Canadian revenues of U.S. tech giants, leading the Biden administration to argue it went against the USMCA and ask last year for dispute resolution talks. The Liberal government rescinded the tax in June after pushback from Trump.

“Disputes among neighbours are sometimes remedied more quickly by conversation, rather than by trade tribunal,” Tronnes wrote. That said, she argued dispute resolution mechanisms need updating. “In the age of AI, data and intellectual property theft and foreign adversaries with cyber armies, dispute resolution mechanisms need to work much faster,” she wrote, suggesting shorter processes to ensure problems are addressed quickly, but with longer timelines for appeals.

Beth Burke, CEO of the Canadian American Business Council recommended all three countries make a binding commitment to the principles of the USMCA. “This includes a commitment against the imposition of tariffs on USMCA-protected goods that would otherwise eliminate or reduce the gains secured through this agreement,” she wrote.

Tronnes argued that tariffs undermine what Trump is trying to achieve. “Competition for manufacturing jobs within North America happens and each country is seeking foreign direct investment in its own right. Some competition between countries for primacy of manufacturing is normal,” she wrote. “But USMCA’s attraction for new investment and manufacturing no longer holds if tariffs can be enacted across the continent despite the agreement.”

In any case, Tronnes joins other witnesses in pushing for improvements to a good deal, rather than starting all over again: “If a review is truly what is being proposed, then a review will do—it should not be considered a wide-open renegotiation.”